04/08/2015
The results of the first half of 2015 for companies support TADAWUL All Share Index
TADAWUL All Share Index closed last Thursday at a level of 9372 point increased 285 point, estimated at 3.14% over the close of June. That positive increase was despite the current events that had a negative impact on the market such as the Greece debt crisis and oil prices falling due to the Iran’s nuclear deal, did companies result effect this increase in the index positively?
94 company of the 171 listed in the Saudi market has announced by the end of last Thursday their financial results. 58 of which has announced a decrease compared to the first half of 2014, while 28 companies shown a decrease in their profits. The best results were among the baking sector, there was an increase in the profits of 11 of the 12 banks listed in the market. The results of the cement companies varied. Half of the companies showed an increase in the profits, while the other half showed a decrease. Most of the companies that showed an increase in the profits are new companies, which means they had seized a portion of the cement sales, thus effected the other companies in light of the exporting ban, and limiting sales to the local market.
Petrochemical companies announced the result of 8 of its fourteen companies, 5 of which showed a decrease in the profits, while three companies results showed an increase in the profits, amongst which is petrochem, which showed an estimated growth of 21%, while Advanced Petrochemical showed 3% growth in profits. The petrochemical sector is still awaiting the results of SABIC, which is the most effective component in this sector.
As for the retail sector, six companies had recorded a growth, while three other has shown a decline in their profits. All the companies of the multi-investment sector has recorded a decrease in their profits, as well as the transport sector in all its announced companies. As for the Real estate and property development sector, its profits were down by 50%, which is considered quite normal considered the recent fall in the real estate princes, starting from the middle of 2014. As for the communication and informational technology sector, only Zain has announced its results, where it managed to minimize loses by approximately 29%. The sector is still awaiting for STC and Mobily to announce their results, since Mobily is still affected by the juggle with figures during 2014, which caused major lose, the price of stocks lost 64% of its original price.
The last period to announce the result for the remaining listed companies, which are 77 is the end of next Monday. SABIC, which is one of the strongest companies in the market, will announce its results next Sunday, which in turn will affect the market. It is certain that there will be a decline in the profits compared to the first quarter of this year, due to the sharp decline in oil prices. However, this decline will be less than the first quarter of the year.
Financial analysts average of estimation is about 4.66 billion riyal, with a growth estimated at 730 million riyals, compared to the first quarter of this current year. The market is still awaiting STC to announce its results. Analysts are expecting the company to grow by 8% with a net profit of 3.04 billion riyals, compared to the first quarter of 2014. The company’s net profits of the first quarter of 2015 were at 2.5 billion riyals.
This growth of most of the companies has contributed to lowering the Price–earnings ratio of the stock market. It fell to 18.5, which is a positive indicator. We are currently awaiting for the results of the rest of the companies, which has not been announced yet, and might contribute to lowering Price–earnings ratio. The reaming challenge is the oil princes, which will have a negative impact if the prices dropped, particularly on the prices of the petrochemicals sector.
